Iraq contains 110 trillion cubic feet (Tcf) of proven natural gas reserves, along with roughly 150 Tcf in probable reserves. About 70 percent of Iraq's gas reserves are associated gas (gas produced in conjunction with oil), with the rest made up of non-associated gas (20 percent) and dome gas (10 percent).

Until 1990, all of Iraq's natural gas production was from associated fields. In 1996, Iraq produced slightly more than 128 billion cubic feet (Bcf), down drastically from peak output levels of 700 Bcf in 1979. Within two years after the lifting of U.N. sanctions, Iraq hopes to produce 550 Bcf of gas. Within a decade, Iraq aims to be producing about 4.2 Tcf of gas annually.

In October 1997, Iraq invited international partners to invest in natural gas projects worth $4.2 billion. Generally, Iraq's policy is to award gas and oil concessions to companies from countries supporting the easing or lifting of U.N. sanctions (i.e., France, China, Russia).

Iraq's primary sources of associated gas are the Kirkuk, Ain Zalah, Butma, and Bai Hassan oil fields in northern Iraq as well as the North and South Rumaila and Zubair fields in the south. About 70 percent of Iraq's associated gas production capacity is located in southern part of the country.

Gas flaring was reduced from roughly 50 percent in 1989 to under 5 percent in 1994. This was accomplished mainly through increased use of Iraq's two gas gathering systems, which were built in the 1980s. The Northern Area Gas Project started operation in 1983. It is able to recover and process up to 550 million cubic feet per day (Mmcf/d) of sour gas, with a resulting maximum output capacity of 300 Mmcf/d of dry gas as well as a mix of propane, butane, natural gasoline, and pure sulfur.

The Southern Area Gas Project was completed in 1985, but was not brought online until February 1990. It has nine gathering stations and a larger processing capacity of 1.5 billion cubic feet per day. Gas gathered from the North and South Rumaila and Zubair fields is carried via pipeline to a 575-Mmcf/d natural gas liquids (NGL) fractionation plant in Zubair and a 100-Mmcf/d processing plant in Basrah.

At Khor al-Zubair, a 17.5 million cubic foot LPG storage tank farm and loading terminals were added to the southern gas system in 1990. LPG export capacity was 4 million tons per year in 1990. In addition, Iraq built another system in 1985 to recover up to 200 Mmcf/d of gas from the Jambur field.

Iraq's only non-associated gas production is from the al-Anfal field in northern Iraq. Al-Anfal was brought online in 1990 with output of 200 Mmcf/d. Al-Anfal production is piped to the Jambur gas processing station near the Kirkuk field, which is 20 miles away. Al-Anfal's gas resources are estimated at 4.5 Tcf, of which 1.8 Tcf is proven.

In March 1996, Iraq and Turkey signed an initial memorandum of understanding regarding a gas supply deal between the two countries. Their commitment towards this deal was reaffirmed publicly in December 1996 and May 1997.

The $2.7 billion project will involve building of an 855-mile, 350 Bcf annual capacity gas export pipeline linking northern Iraq to Turkey's Anatolia region. The proposed pipeline will have two compressor stations.

Gas will be supplied from five non-associated gas fields in northern Iraq with combined reserves of 9.5 Tcf. These fields comprise al-Anfal (1.8 Tcf), Chemchemal (2.1 Tcf), Jeria Pika (0.9 Tcf), Khashim al-Ahmar (1.4 Tcf), and Mansuriyah (3.3 Tcf). Plans call for development work at al-Anfal and Mansuriyah to be tapped first, followed by other fields where more limited exploration work has occurred. During the first three years following start-up, targeted gas export levels will be 200 Mmcf/d, 345 Mmcf/d, and 1 Bcf/d, respectively.

ELECTRIC POWER:

Around 90 percent of Iraq's national power grid was destroyed in the Gulf War. Existing generating capacity of 9,000 megawatts (MW) in December 1990 was reduced to only 340 MW by March 1991. Roughly 85 percent of Iraq's 20 power stations were damaged or destroyed in the Gulf War.

In early 1991, transmission and distribution infrastructure also was destroyed, including the 10 substations serving Baghdad and about 30 percent of the country's 400-kilovolt (kV) transmission network. In early 1992, Iraq stated that it had restarted 75 percent of the national grid, including the 1,320-MW Baiji and Mosul thermal plants as well as the Saddam Dam.

In 1998, Iraq's maximum available electric generation capacity was estimated (by Iraq) at around 4,000 MW, with a report in November 1999 indicating that this figure may have increased even further, to 6,000 MW. Iraq is hoping to increase spending on electricity projects by a reported $306 million. Iraq's Electricity Commission head, Salah Yusuf Qusayr, said in September 1999 that six gas-fired power plants with a total capacity of 222 MW were being imported from China. The units are scheduled to come online in June 2000.

ENERGY OVERVIEW

Minister of Oil: Lt. Gen. 'Amir Muhammad Rashid

Proven Oil Reserves (1/1/99E): 112.5 billion barrels

Oil Production (January-September 1999 estimated average): 2.66 million barrels per day (MMBD), of which 2.64 million bbl/d is crude oil

Oil Production (9/99E): 2.88 MMBD (of which 2.85 MMBD is crude oil)

Oil Production Capacity (11/99E): 2.8-2.9 MMBD

Projected Oil Production Capacity: Possibly 3.0 MMBD by end of 2000; plans for 3.5 MMBD by the end of 2000; 6 MMBD within 10 years

Number of People per Motor Vehicle (1997): 19.6 (vs U.S. value of 1.3)

Status in Climate Change Negotiations: Iraq is not a signatory to the United Nations Framework Convention on Climate Change or to the Kyoto Protocol.

Major Environmental Issues: Government water control projects have drained most of the inhabited marsh areas east of An Nasiriyah by drying up or diverting the feeder streams and rivers; a once sizable population of Shi'a Muslims, who have inhabited these areas for thousands of years, has been displaced; furthermore, the destruction of the natural habitat poses serious threats to the area's wildlife populations; inadequate supplies of potable water; development of Tigris-Euphrates Rivers system contingent upon agreements with upstream riparian Turkey; air and water pollution; soil degradation (salination) and erosion; desertification

Major International Environmental Agreements: A party to the Law of the Sea and the Nuclear Test Ban. Has signed, but not ratified, Environmental Modification

Major Companies: The Oil Ministry oversees the nationalized oil industry through the Iraq National Oil Company (INOC). Autonomous companies under INOC include the State Company for Oil Projects (SCOP) - design and engineering of upstream and downstream projects; Oil Exploration Company (OEC) - exploration; Northern Oil Company (NOC) and Southern Oil Company (SOC) - upstream activities in northern/central and southern Iraq, respectively; State Organization for Oil Marketing (SOMO) - crude oil sales and OPEC relations; Iraqi Oil Tankers Company (IOTC); and various departments within the Ministry of Oil which run Iraq's internal pipeline systems, distribute oil products, operate downstream natural gas/LPG projects and gas bottling plants.